SMM Metals Reports

SHANGHAI, Aug. 1 (SMM) - In a July issue of Commodities Weekly, China economists at Barclays argued that slowing economic growth, waning business confidence and a recent tightening in liquidity conditions have increased the risk of a hard landing in China.

If China were to truly suffer a hard landing, GDP would have to fall to about 3% and copper would collapse 60% to $2,335 per ton, Barclays’ research team said in the report.

Lead prices could fall to $850 per ton and zinc to a little over $1,000 per ton, both a 40-50% drop from current prices. Aluminum prices could slip 30% to $1,234 per ton, they said.

Instead, we would like to invite industry participants from home and abroad to come and discuss whether copper could slump 60% if GDP falls to, say, 6% at 4th SMM Annual Metals Summit in Shanghai, November 18-19.

SMM’s research team believes that If China’s GDP falls to 3%, what should be watched for is a social upheaval nationwide, not a slump in prices of copper or other hard assets which would become quite worthless.

China's economic growth must not slip below the "bottom line" of 7%, premier Li Keqiang told a policy meeting in early July.

GDP of 6% would be a critical point for copper demand and prices, because such a level of growth could start to affect the metal’s demand elasticity, according to SMM’s analysts.

Li Keqiang’s new team is trying to shift the country to a healthier form of growth, rationing credit for steel, cement, and ship building, all sectors with huge overcapacity.

We would also like to have participants to our 4th SMM Annual Metals Summit to explore the changes taking place in China for a clear clue and to assess the impact on their businesses in the year to come!